63 Pa. Super. 318 | Pa. Super. Ct. | 1916
Opinion by
John C. Montgomery in the third paragraph of his will placed his personal estate in the hands of a trustee, and directed that the net income of the estate be paid to his brother, M. F. Montgomery, during his natural life, and at his death, to a niece, Edith Curry, during her natural life, and at the death of the said M. F. Montgomery or Edith Curry, or the survivor of them, he bequeathed the principal unto the children of the said Edith Curry, if any were left to survive her, and if no children were left to survive her, then he directed said trustee to convert the property into cash, and the bal
It will be perceived that there was a life estate in M. F. Montgomery, followed by a life estate in Edith Curry, a remainder to her children, if any survived her, and if none, then a remainder to the male relatives of his father who bore the name of Montgomery living at the death of the said M. F. Montgomery and Edith Curry or the survivor of them.
The register of wills of Lancaster County appointed an appraiser to value and appraise the real estate of the decedent. He appraised both the real estate and personal property, the latter being fixed at the sum of $21,051.05. The court allowed the collateral inheritance tax on the entire amount.
The question is whether the entire personal estate is subject to the tax, M. F. Montgomery and Edith Curry being still in life, or whether the collateral inheritance tax on the estate passing to the remaindermen must be paid after the expiration of the life estates. Under Section 3, Act of May 6, 1887, P. L. 79, it is provided that bequests to collaterals to take effect in possession after the expiration of one or more life estates, shall not be taxable or bear interest until the persons liable for the same shall come into actual possession after the termination of the estates for life, and the tax shall be assessed upon the value of the estate at the time the right of possession accrues to the owner. Under the proviso of said section, the owner has the right to .anticipate the time for the payment of the tax and in such case the tax is assessed on the value of the estate at the time of payment after deducting the value of the life estate. There is a- further proviso, that the owner of any personal estate shall make a full return of the same to the registrar of wills of the proper county within one year after
Under the terms of the will before us, we cannot tell who will ultimately take the estate, and therefore under the rule laid down in Coxe’s Est., 193 Pa. 100, the second proviso of the above section is incapable of application. In this, as in that case, it is not possible now to say who the remaindermen will be who will take the estate. We cannot now tell whether the children of Edith Curry will be the beneficiaries under the Avill or whether the-estate will go to the male relatives of decedent’s father bearing the name of Montgomery. The court allowed the tax against the entire personal estate, assigning as reasons for his action the folloAving: First, we quote the language of the court. “We might stop here and dismiss the exceptions for the ‘owners’ of the ‘personal estate’ have not entered ‘into security for the payment of the tax’ and it has not been offered as a reason for not having done so that they cannot be ascertained and identified immediately, as in Coxe’s Est., 193 Pa. 100.” We cannot see how the beneficiaries under the will who are to be the ultimate objects of its provisions can be charged with not having offered as a reason for not having furnished a bond that they cannot be ascertained and identified immediately. This would be an absurdity. The very provisions of the Avill show us that the persons who are to take the estate cannot now be determined. As in Coxe’s Est., supra, “the solution of the question requires only an examination of the will of the testator to learn, if we can, who are the persons who are to take the collateral estate in remainder after the determination of the life estate” and “hoAV is it possible now to say who those persons are or who they will be.” If they cannot noAv be ascertained, how. can they be charged with a failure to maintain their rights?
Second, The court holds that Section 3 has no appli
The law recognized the estates for life and in remainder as liable each for its own tax, and neither as liable for the other. The Act of March 11, 1850, P. L. 170, Section 1, provided that in all cases where there was a bequest to collateral relatives liable to the tax to take effect in possession, after the expiration of life estates they could abide the actual possession of the estates provided they entered security. The Act of 1887, Section 3 above referred to, reenacts that part of the Act of 1850 and uses the same words, “in all cases, etc.” Wherever there is a postponement of the actual enjoyment of the estate by reason of the erection of a preceding life estate there shall be no tax collectible until possession accrues, and this the legislature has declared is to be so in all cases. We do not feel warranted in the face of the fact that the Act of 1887 recognizes that life estates and estates in remainder may each be separately assessed, to read into the act the words, that the life estates preceding the estates in remainder must be such as are not taxable because not held by collaterals. One thing stands out clearly, and that is that the remainderman shall not be compelled to pay the tax until he takes the estate. The nature of the preceding estates is not the criterion, but the postponement of the enjoyment or possession is what determines the exemption from present liability. In Brown’s Est., 208 Pa. 16.1; Penn-Gaskell’s Est. (No. 1), 208 Pa. 342; and in Burkhart’s Est., 25 Pa. Superior Ct. 514, both .the life estates and remainders were liable
Third, The court however stated that proceedings under the third section of the act are not before it; that there was no demand made to1 the appraiser for the fixing of the value of the life interest, and no appeal taken as provided by Section 12 of the act. The difficulty however that presents itself is that the appraisement made in this case is not in conformity with the act. It does not purport to be an appraisement of the several interests of the parties, and it was the duty of the appraiser to make an appraisement of the life interests, and failing to comply with the requirements of the act, the appraisement was as- in Burkhart’s Est., 25 Pa. Superior Ot. 514, “no appraisement at all.” There is no> proof that notice was given to any one of the parties in interest, and apart from this as stated before, there is nothing from which' the remaindermen could appeal. As. far as the remaindermen are concerned, when the estate finally passes to them, the value of it can be fixed as required by the act. The remaindermen being unascertained and therefore not being required to file a bond, it is hard to say how an appraisement under the Act of 1887 could bind them, and certainly not an appraisement such as appears in the case before us.
Fourth, In further support of his conclusion, the learned judge of the Orphans’ Court decided that under the sixth Section of the Act of 1887 the court has original jurisdiction .over the matters therein mentioned, and that the case before us falls within the provisions of the section. The section reads as follows: “If the legacy subject to collateral inheritance tax be given to any person for life, or for a term of years or for any other limited period, upon a condition or contingency, if the same be money, the tax thereon shall be retained upon the whole amount; but if not money, application
Fifth, It is argued that the remaindermen lose noth
The decree of the lower court dismissing the exceptions and confirming the adjudications in so far as it awards the- register of wills collateral inheritance tax to the amount of $915.72, is set aside, and distribution is to be made in accordance with this opinion. Appellee for costs.